Forex Today: Markets remain focused on tariff headlines as new week begins
Here is what you need to know on Monday, March 10:
The US Dollar (USD) Index fell more than 3% last week and registered its largest one-week loss since November 2022. The economic calendar will not feature any high-impact data releases on Monday, allowing investors to remain focused on geopolitics and headlines surrounding US President Donald Trump's trade policies.
The USD suffered large losses against its major rivals to begin the month of March as the disappointing macroeconomic data releases, combined with the Trump administration's tariffs, revived fears over an economic downturn in the US. Early Monday, the USD Index trades marginally lower on the day below 104.00, while US stock index futures lose between 0.4% and 0.6%.
US Dollar PRICE Last 7 days
The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the weakest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -4.29% | -2.62% | -1.89% | -0.58% | -1.79% | -2.22% | -2.69% | |
| EUR | 4.29% | 1.62% | 2.29% | 3.67% | 2.50% | 1.97% | 1.49% | |
| GBP | 2.62% | -1.62% | 0.74% | 2.02% | 0.87% | 0.35% | -0.13% | |
| JPY | 1.89% | -2.29% | -0.74% | 1.55% | 0.16% | -0.28% | -0.81% | |
| CAD | 0.58% | -3.67% | -2.02% | -1.55% | -1.06% | -1.64% | -2.11% | |
| AUD | 1.79% | -2.50% | -0.87% | -0.16% | 1.06% | -0.52% | -0.99% | |
| NZD | 2.22% | -1.97% | -0.35% | 0.28% | 1.64% | 0.52% | -0.48% | |
| CHF | 2.69% | -1.49% | 0.13% | 0.81% | 2.11% | 0.99% | 0.48% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
On Friday, the data published by the US Bureau of Labor Statistics showed that Nonfarm Payrolls rose by 151,000 in February. This reading came in below the market expectation of 160,000. Other details of the employment report showed that the Unemployment Rate edged higher to 4.1% from 4% in January, while the Participation Rate declined to 62.4% from 62.6% in the same period. In his last public appearance before the March policy meeting, Federal Reserve (Fed) Chairman Jerome Powell noted on Friday that the uncertainty around the Trump administration's policies are high and repeated that they can maintain policy restraint for longer if inflation progress stalls or that they can ease the policy if the labor market unexpectedly weakens.
EUR/USD preserved its bullish momentum and gained more than 4% in the previous week. The pair stays in a consolidation phase at around 1.0850 in the European morning on Monday.
GBP/USD benefited from the broad-based USD weakness and rose more than 2.5% last week. The Bank of England (BoE) will release its Quarterly Bulletin later in the day. At the time of press, the pair was trading virtually unchanged on the day at around 1.2920.
Gold registered weekly gains but struggled to gather bullish momentum after reclaiming $2,900. XAU/USD holds steady near $2,910 to begin the European session.
USD/CAD gained traction and snapped a three-day losing streak on Friday. The pair fluctuates in a tight channel slightly above 1.4350 in the European morning on Monday. On Wednesday, the Bank of Canada (BoC) will announce monetary policy decisions. Meanwhile, Trump told Fox News over the weekend that tariffs on some imports from Canada and Mexico planned for April 2 could go up.
USD/JPY stays on the back foot and trades in negative territory below 148.00 to begin the new week. The data from Japan showed earlier in the day that Labor Cash Earnings rose by 2.8% on a yearly basis in January, following the 4.4% increase recorded in December and falling short of the market expectation of 3.2%.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
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